Axis Bank profit falls 19.3 percent sequentially
Axis Bank’s profit grew 94.2 percent in the June 2021 quarter over a year ago, while provisionings fell 20 percent.
The second wave of COVID-19 hit India hard in the April-June 2021 quarter. Yet, the absence of a strict nation-wide lockdown ensured that India Inc did not face body-blows as it did in the same quarter last year.
Axis Bank, India’s third-largest private bank, is a case in point.
On Monday, it reported standalone profit of Rs 2,160 crore in the first quarter of fiscal year 2022, down 19.3 percent from Rs 2,677 crore in the quarter ended March 2021.
However, it was 94.2 percent more than its profit of Rs 1,112 crore a year ago.
At nearly Rs 19,592 crore, Axis Bank’s total income grew by 2.9 percent on a year-on-year basis, but declined 2.8 percent over the previous quarter.
The bank’s profit for the quarter got a boost from lesser loan-loss provisioning at Rs 3,532 crore in the quarter ended June 2021–20 percent lesser than Rs 4,416 crore a year ago. However, provisioning increased by 7.2 percent over the previous quarter.
Increase in employee cost, at Rs 1,852 crore during the June quarter, caused a dent in Axis Bank’s profitability, as there was an annual increase of 31.7 percent from Rs 1,406 crore last year, while employee cost increased 11 percent sequentially from Rs 1,668 crore in March 2021.
“The journey we started two years back is gathering momentum with a strong balance sheet, conservative provisions and a steady operating performance supporting our aspirations,” said Amitabh Chaudhry, CEO of Axis Bank said in a stock exchange filing.
Separately, Axis Bank said it used the June 2021 quarter to widen its leadership in the digital banking space. For instance, it announced a long-term partnership arrangement with Amazon Web Services (AWS) to accelerate its digital transformation programme which includes a plan to transition 70 percent of its applications and infrastructure on to cloud in the next few years.
“The Bank’s focus remains on reimagining end-to-end journeys, transforming the core, and becoming a partner of choice for ecosystems,” it said. The Axis Bank-AWS partnership will enhance further agility and resilience to manage two key features that define the bank’s digital business—rapid scale and high velocity.
In terms of its digital banking report card, Axis Bank highlighted that the quarter saw 196 percent annual in total Unified Payment Interface (UPI) transaction value, while its market share stood at 15 percent.
In the mobile banking space, its transaction volumes soared 156 percent annually, while market share grew to 14 percent. Also, Axis Bank’s share of digital transactions in the total financial transactions by individual customers rose to 90 percent, while 60 percent of the personal loan disbursements happened through digital channels.
Axis Bank said it has made progress on its strategy of building a high-quality granular franchise, increasing its relevance in customer-lives and communities, and building the country’s best digital bank.
Edited by Kunal Talgeri